Amiya Kumar Ghosal, Burdwan vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA

[Before Hon'ble Sri Shamim Yahya, AM & Hon'ble Sri George Mathan, JM]

ITA No.1229/Kol/2013 Assessment Year : 2008-09 (APPELLANT) (RESPONDENT) M/s.Amiya Kumar Ghosal -vs- I.T.O., Ward-1(1), Burdwan Asansol (PAN:AAKFA 6590 R)

For the Appellant Shri U.Dasgupta, Advocate

For the Respondent K.L.Kanak, Sr.DR, JCIT

Date of Hearing : 03.03.2015 Date of Pronouncement : 18.05.2015.

ORDER

Per Shri Shamim Yahya, AM

This appeal by the assessee is directed against the order of ld. C.I.T., Asansol passed u/s 263 of the I.T.Act dt. 12.03.2013 and pertains to Assessment year 2008-09.

2. The grounds of appeal raised read as under :-

"1. For that the order of the Ld. Commissioner of Income tax, Asansol, passed u/s 263 of the Act'61, is arbitrary, excessive, hence bad in law.

2. For that on the facts of the case the assumption of jurisdiction u/s 263, of the Act'61, is legally not justified because the assessment order is neither erroneous nor prejudicial to the interest of revenue.

3. For that the AO has applied his mind and framed an assessment after considering all materials gathered from third parties and has arrived at a conclusion, after considering the corrigendum dated 4/12/2010, issued by ECL authorities, and in absence of any fresh materials, thereafter, the order of the ld. CIT setting aside the assessment is beyond jurisdiction and may please be cancelled.

4. For that the amount of rs.25,02,253/- is a part of the gross contract receipts for the subsequent F.Year, and has been subjected to taxation in the Asst.,Year 2009-10, (supported by TDS, issued by ECL), and the same amount cannot be a matter of revision u/s 263, and the order passed may please be cancelled.

5. For that the appellant craves leave to add, alter, amend any further grounds of appeal before or at the time of hearing."

ITA No.1229/Kol/2013 2 M/s.Amiya Kumar Ghosal A.Yr.2008-09

3. In this case in the order u/s 263 of the Act the ld. CIT referred to the operative part of the notice issued in para-2 of his order in this regard as under :-

".....Whereas assessment for the Assessment Year 2008-09 was completed on 15.12.2010 u/s 143(3) of the I.T.Act, 61 on assessed income at Rs.3,66,040/-, I am of the opinion that because of inadequate investigation and incorrect application of law, error has crept into the body of assessment order on the ground as mentioned below :

From the assessment folder pertaining to A.Y.2008-0, it transpired that the main source of income of the assessee firm was from transporting business. The assessee took contract for hiring truck and pay loaders etc. from Eastern Coalfield in a letter no.SLN/C-3/AFM 490 dt.15-11-2010 confirmed that the outstanding liability in respect of assessee as on 31-03-2008 was Rs.25,02,153/-. However the said receivable amount had not been shown in the balance sheet as on 31-03-2008 and thus remained unaccounted. Accordingly, the said receivable amount of Rs.25,02,153/- needed to be treated as income of the assessee and thus to be added to the income.

In view of the above, it has caused the order passed by the AO on 15.12.2010 as erroneous and prejudicial to the interest of revenue...."

3.1. Against such notice assessee made elaborate submissions as under :-

".....The original assessment was completed u/s 143(3) on 15th Decemmber, 2010 on a total income of rs.3,66,040/-, after examination of all books of accounts, papers, documents, bank statements, TDS certificates and after full explanations given by the chartered accountant of the assessee Mr.Tapas Mazumder, who represented the case and who was also the auditor of the assessee.

Moreover, in course of assessment verifications were also made with parties u/s 133(6) and also with the ECL authorities (ECL Salanpur, Area Finance manager), under whom we execute the contract work.

Letters from ECL were obtained and placed on record by the ITO concerned after full verification. Even the ECL has also issued corrigendum letters dated 4/12/2010, rectifying the earlier letter issued to ITO concerned. It cannot be possible that the ITO has overlooked both the letters of ECL sent to the ITO directly in course of assessment.

Both the letters have come by post and very much on record. Thereafter, show cause notice issued u/s 147 dated 20/01/2012, on the same issue as stated in the notice u/s 263.

It is not known as to what happened to the said show cause notice, whether the same is dropped or the same is still pending?

Subsequently, the revenue audit team has also made audit objections, against which the ITO submitted reply to the audit team on the same point. What happened thereafter, it is not known.

Now this notice u/s 263 on the same issue.

Our reply is as follows :

1. Firstly, the order passed by the ITO is neither erroneous nor is it prejudicial to the interest of revenue.

2. Secondly, the assessee always prepared its books of accounts on the basis of bills passed by ECL authorities for payments supported by TDS certificates, because the ECL prepares and passes bills on the basis of actual work done by the parties.

3. As documentary evidence we are filing the LEDGER Account from ECL.

'Books obtained by us on REQUEST from the Area Finance Manager, ECL.

ITA No.1229/Kol/2013 3 M/s.Amiya Kumar Ghosal A.Yr.2008-09

4. This LEDGER is self explanatory and shall solve the dispute without any matter of doubt.

5. The ECL authorities has CERTIFIED that the GROSS BILL amount for the financial year 2007-08, was rs.90,28,500/- which is also the figure disclosed by the assessee and perfectly tallies in all respects.

6. No further bills has either been raised or passed by ECL during the FY 2007-08.

7. The bill alleged by you in your show cause notice u/s 263, amounting to Rs.25,02,153/- is a part of the GROSS BILL of Rs.1,31,86,080/- (relating to financial year 2008-09) relevant to the Asst.Year 2009-10, and has been subjected to taxation for the Asst.Year 2009-10.

8. The certificate of ECL authorities dated 15/02/2012, has cleared this point of dispute.

9. The said facts are also supported by TDS certificates issued by ECL authorities.

10. The question of outstanding bills as on 31/03/2008, would have arisen, only if the said Bill amount is INCLUDED in the Gross contract for the year ending 31/03/2008. Actually, it is not so because the said bill of rs.25 lacs, has formed a part of the Gross Contract Bill of Rs.1.31 crores, for the FY 2008-09 and has already been subjected to taxation.

11. Your action will lead to double taxation of the same amount.

12. Moreover, all materials were before the ITO in original proceedings and he has applied his mind, and has rightly, considered the material, and arrived at a conclusion.

13. The order passed is not erroneous and the revenue has suffered no loss because the said amount has suffered taxation."

3.2. Considering the above submissions the ld. CIT held that issue narrated as in para 2 above needs further investigation and scrutiny in the light of the facts and circumstances mentioned above. Therefore the ld.CIT deemed it proper to set aside the issue to the file of AO with the direction to complete the assessment afresh keeping in mind the observations in the foregoing paragraphs.

4. Against the above order assessee is in appeal before us. The ld. Counsel of the assessee took us to the notice issued u/s 263 of the Act and the assessee's reply therein. He submitted that the issue raised in the notice was duly considered by the AO in the course of assessment. The ld.CIT(A) has referred to a letter of Eastern Coalfield (ECL) regarding outstanding liability in respect of the assessee as on 31.03.2008 which was said to be Rs.25,02,153/-. From this the ld. CIT inferred that the said amount has not been shown in the balance sheet and thus remained unaccounted. The ld. Counsel took us to the submissions and explained that this matter was duly enquired by the AO. Even ECL has issued a corrigendum letter dated 4.12.2010 rectifying the earlier letter issued to the said AO. The ld. Counsel submitted ITA No.1229/Kol/2013 4 M/s.Amiya Kumar Ghosal A.Yr.2008-09

that by no stretch of imagination it can be said that the ITO has overlooked both the letters of ECL sent to the AO directly in the course of assessment. The ld. Counsel further submitted that ECL authorities have duly certified that gross bill amount for the financial year 2007-08 was Rs.90,28,500/- which is also the figure disclosed by the assessee and perfectly tallies in all respects. The bill referred by the ld. CIT amounting to Rs.25,02,153/- was part of the gross bill of Rs.1,31,86,080/- relating to financial year 2008-09 relevant to A.Yr.2009-10 and has been subjected to taxation for A.yr.2009-10. Thus the ld. Counsel submitted that the entire matter was enquired by the AO and this was placed before the ld.CIT also. Despite the above submissions the ld. CIT has set aside the case to the file of AO to make further investigation and scrutiny. The ld. Counsel submitted that nowhere in the order the ld. CIT has concluded that order of the AO was erroneous or prejudicial to the interest of the revenue. In such circumstances the ld. Counsel pleaded that the ld. CIT's order u/s 263 of the Act is liable to be quashed.

5. The ld. DR, on the other hand, relied on the order of the ld. CIT u/s 263 of the IT Act.

6. We have carefully considered the submissions and carefully perused the records. We find that the matter referred by the ld. CIT pertaining to outstanding liability with respect to M/s.ECL has been duly enquired by the AO during the course of assessment proceedings. The matter has duly been explained by the assessee before the ld. CIT. The ld. CIT has not at all found any shortcoming in the submissions of the assessee. The ld. CIT has nowhere mentioned that order of the AO was erroneous and prejudicial to the interest of the revenue. Without any cogent reason the ld.CIT has set aside the matter to the AO for further investigation and scrutiny. In our considered opinion this is beyond the scope of section 263 of the Act. Dehors any finding that AO's order is erroneous and prejudicial to the interest of the revenue, the ld. CIT cannot exercise his jurisdiction u/s 263 of the Act. Moreover, the matter has been duly examined by AO during the course of assessment and the assessee has duly made the ITA No.1229/Kol/2013 5 M/s.Amiya Kumar Ghosal A.Yr.2008-09

submissions before the ld. CIT. Hence there does not remain any scope for further investigation and scrutiny. Accordingly we quash the order passed u/s 263 of the Act.

7. In the result the appeal filed by assessee stands allowed.

Order pronounced in the court on 18.05.2015.

Sd/- Sd/- [ George Mathan ] [Shamim Yahya] Judicial Member Accountant Member

Date: 18.05.2015.

R.G.(.P.S.)

Copy of the order forwarded to:

1. M/s.Amiya Kumar Ghosal, Rupnagar, Rupnarayanpur, Dist.Burdwan, Pin-

713335.

2 I.T.O., Wd-1(1), Asansol.

3. CIT, Asansol.

5. CIT(DR), Kolkata Benches, Kolkata.

True Copy, By order,

Asst. Registrar, ITAT, Kolkata Benches